Corporate responsibility or limiting liability?

For the Monitor
Published: 5/16/2021 10:00:15 AM

There was an article in the Concord Monitor on May 6 about Peloton recalling about 125,000 treadmills after a 6-year-old child died in February by being pulled under the rear of the machine. That was not an isolated incident. There had been dozens of reports of accidents involving children and pets being pulled under the machine and seriously injured.

On April 17, the U.S. Consumer Product Safety Commission (CPSC) issued a warning to people who had pets and children to stop using the treadmill. In response, Peloton stated the warning was “inaccurate and misleading.” The company told its consumers to keep children and pets away from the machine “at all times.” They felt that just issuing a warning would suffice.

On April 20, a consumer class action lawsuit was filed against the company, and on April 29, a second lawsuit was filed on behalf of Peloton investors who complained that the company’s failure to recall the product caused a drop in the value of their stock.

On May 5, Peloton finally acknowledged that the exercise machine was dangerous and issued the recall. The company is refunding customers the cost of the machine, which is $4,295. The day the recall was issued the stock lost 15% of its value, dropping by $4.1 billion in one day.

Is this an example of corporate responsibility or a case of a corporation trying to limit financial liability? I’d like to think Peloton recognized the error of its ways and pulled the product because it was dangerous and they felt they had a responsibility to provide a safe product. But, more likely, it was a case of covering their butts to avoid many more multi-million dollar lawsuits.

With most cases involving consumer products, a combination of consumer protection regulations, which oversees the production of consumer products, and litigation, which financially incentivizes companies to produce safe products, succeeds in keeping the consumer safe and whole.

When I read about Peloton’s recall, I immediately thought about another consumer product industry that manufactures dangerous products — the gun industry. Ironically, over the course of the past year during the pandemic, both industries have experienced record sales of their products. Peloton took advantage of the fact that gyms were closed to sell their products for at-home use. The gun industry has seen a record climb in sales because of the fear that the Democrats will succeed in passing stricter gun safety laws. Both industries have amassed huge fortunes over the past year.

In our own backyard, Sturm, Ruger & Co. reported a nearly 50% boost in revenue to $184.4 million, for the first quarter of 2021 over the same quarter in 2020. In the first quarter, the company produced 542,000 guns, but it left the company with a backlog of 1.8 million guns on order.

Peloton’s fortunes were impacted by the discovery of a dangerous product, but the gun industry is shielded from financial liability by a law that was passed by Congress in 2005. The Protection of Lawful Commerce in Arms Act (PLCAA) shields firearms manufacturers and dealers from being held financially liable when their products have been misused by others.

Once one of their guns is legally sold through a dealer, all liability vanishes if the gun is misused or used during the course of a crime.

Why are the manufacturers of dangerous guns and dangerous treadmills not held to the same legal and regulatory standard? Why shouldn’t gun manufacturers be held to the same standard if their products end up killing children?

Imagine if the cigarette companies had been shielded from liability when scientists finally became aware of the dangers of smoking. The lawsuits revealed that the cigarette companies knew their products were deadly, which finally brought the manufacturers to their knees.

Similarly, automobile manufacturers are constantly issuing recalls to fix dangerous and defective products. Imagine if they were shielded from liability. Perhaps we wouldn’t have to spend so much time at the repair shop waiting for the cars to be fixed. But at least they own up to their responsibility to provide safe products and consumers are given some peace of mind that they are driving a safe car.

There can be no dispute about the fact that guns are dangerous. According to the Gun Violence Archive, there have been 200 mass shootings in the U.S. so far in 2021. A mass shooting is defined as one in which four or more people are shot or killed, not including the shooter. During those mass shootings, 231 people have died and 899 people were wounded. So far in 2021, the overall death count as a result of gun-related violence has reached 15,000.

Just one child was killed by Peloton’s treadmill, but they owned up to their responsibility at the expense of their financial bottom line.

Gun rights advocates will say the Second Amendment is greater than all other amendments in the Constitution and gives them the absolute right to own firearms. How is that right greater than the right to life, liberty and the pursuit of happiness?

Falling back on the Constitution to justify the limitation of liability does not make any sense. The Second Amendment should not be used to protect gun manufacturers. Limiting liability is just another way of eliminating accountability. It is high time for the gun manufacturers to be held accountable for all the deaths and injuries their dangerous products cause. It is time to repeal the PLCAA.

(Susannah Colt lives in Whitefield and can be reached at susannahbcolt@gmail.com.)




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